After this morning's selling pressure, the dip buyers are more aggressive and have the market at the highs of the day. There's still plenty of red on the screens, but it's a relief to see normal action instead of the relentless one-way move that made bears and underinvested bulls so uncomfortable.
It feels like human beings are trading today, not computer programs.
This makes me more positive about the market than I felt with the recent straight-up moves. I am more confident that individual stock picking will become important again with back-and-forth action, instead of everything moving together in one direction.
As a pullback plays out, we should see interest in certain names while others fail to find support. When the market starts separating winners from losers, it provides additional opportunities to trade, rather than picking the overall direction of the indices.
I'm hoping that we don't bounce back too quickly and shake out short termers who caught the recent move. As earnings reports start rolling in, we will see if individual stocks are responding to the news.
Perhaps I'm being overly optimistic to expect the market to trade in more "normal" fashion, but action like today's makes me think that maybe there are still humans out there who trade logically.
We need to give this market more room to correct. Earnings season is likely to provide good trading, so don't be too negative. I'm headed out early today, so have a good evening and I'll see you in the morning.